WTI crude prices have declined below $66.50, hitting their lowest level since December 2021, as the increased US crude stockpiles and rising trade tensions dampen sentiment. The Energy Information Administration (EIA) reported that US crude stockpiles grew by 3.614 million barrels, contrary to market estimates of a drawdown. Moreover, fears of the economic effects of newly imposed US tariffs on Canada, Mexico, and China have also put pressure on oil prices. OPEC+’s move to go ahead with its scheduled production hike from April has also fueled bearish sentiment in the market, triggering concerns of oversupply in the face of softening global demand.

KEY LOOKOUTS

• The EIA registered a 3.614 million-barrel rise in crude oil inventories, well above market estimates and putting pressure on WTI prices.

• Freshly imposed US tariffs on China, Mexico, and Canada contribute to economic slowdown fears, potentially dampening worldwide crude demand and adding more pressure on prices.

• OPEC+ reaffirmed production hikes from April, the first since 2022, sharpening supply fears and pushing WTI lower.

• WTI crude touched its lowest since Dec 2021, failing to find traction in bearish fundamentals as traders look to further downside risks.

WTI crude prices have fallen below $66.50, weighed down by a bigger-than-anticipated increase in US crude inventories, rising trade tensions, and OPEC+’s move to boost production. The Energy Information Administration (EIA) reported that US inventories jumped by 3.614 million barrels, sharply different from market expectations of a fall. In addition, uncertainty surrounding the economic effect of fresh US tariffs on Canada, Mexico, and China has caused growing concerns of decreasing demand, further weighing on market sentiment. At the same time, OPEC+ has scheduled its first output increase since 2022, further supporting supply concerns and putting additional pressure on oil prices downwards. With WTI at its lowest level since December 2021, investors are also wary of additional downside risks for the market.

WTI crude oil prices have fallen below $66.50 as US crude inventories rose by 3.614 million barrels, more than forecasts. Rising trade tensions and OPEC+’s production hike plan also contribute to bearish pressure, with investors concerned about slowing global demand and supply glut.

• Crude oil prices recorded a new low since December 2021 as bearish market sentiment dominated.

• EIA indicated a rise in inventories by 3.614 million barrels, significantly higher than market forecasts of a decline.

• Imposition of new US tariffs on Mexico, Canada, and China spooked markets with fears of economic slowdown, weighing on oil demand.

• OPEC+ plans to boost oil production from April, a first since 2022, putting pressure on supply.

• The market had been expected to decline towards a 290,000-barrel drop, but the surprise inventory build triggered a steep price fall.

• Technical weakness coupled with deteriorating fundamentals keeps crude oil under pressure from selling.

• Market players are keenly monitoring trade trends, supply fundamentals, and economic indicators for future price movements.

The recent events in the crude oil market have indeed sent alarmed signals for traders and investors. The Energy Information Administration (EIA) had reported a huge build-up of US crude inventories, with stocks increasing by 3.614 million barrels. This sudden surge has created talks regarding the possibility of oversupply within the market. Furthermore, OPEC+ has made a decision to go ahead with an April production boost, the first such change since 2022. The action is in line with the group’s plan to keep supplies steady in the face of continued economic uncertainty. At the same time, geopolitical events, such as recently imposed US tariffs on Canada, Mexico, and China, have contributed to the market’s complexity.

WTI CRUDE OIL Daily Price Chart

Chart Source: TradingView

These tariffs have raised fears of possible economic slowdowns, which would impact worldwide demand for crude oil. Most industries depend on stable trade relationships, and the disruptions caused by tariffs can trigger changes in patterns of production and consumption. Additionally, market players are watching closely policy choices and supply chain shifts that can affect long-term energy demand. As the oil market traverses this transition, eyes are still on critical determinants like world economic performance, geopolitical events, and strategic actions of leading oil-producing countries.

TECHNICAL ANALYSIS

WTI crude oil is under pressure to sell, its price at the lowest since December 2021. The trend in prices is bearish, with the crucial resistance points around $67.00 and $68.50 and immediate support at $65.00. A break below this support level might spark further downside action, building up selling pressure. Moving averages reflect a downward slope, with the price currently below the 50-day and 200-day moving averages, pointing to sustained weakness. Also, momentum gauges like the Relative Strength Index (RSI) point towards oversold conditions, which might imply short-term consolidation before a direction move. Traders will be observing closely volume trends and any fundamental drivers that might affect price action in the subsequent sessions.

FORECAST

WTI crude oil prices may witness a possible bounce if market fundamentals favor buyers. Recovery might be seen if US crude inventories report a decrease in subsequent EIA releases, reflecting stronger demand. Moreover, any upbeat news in world trade, for instance, the resolution of tariffs or better-than-expected economic growth projections, may help buoy crude prices. If WTI is able to breach the major resistance levels of $67.00 and $68.50, it might set the stage for a bull run recovery, possibly towards the $70.00 psychological level. In addition, unforeseen supply interruptions or geopolitical tensions in key oil-producing areas can also drive a price rise.

WTI is susceptible to additional declines if bearish pressures continue. The sharp increase in US crude stocks, as well as OPEC+ agreeing to boost output from April, contributes to fears of oversupply in the market. If further weakness in demand expectations arises on account of economic uncertainty, especially due to the effects of tariffs on international trade, WTI could persist with the bearish move. A strong break below the support level of $65.00 might exacerbate selling pressure, pushing prices to $63.50 or even lower. Also, technicals indicate crude under selling pressure, and further evidence of declining global demand might continue to keep the market bearish.